The News & Mail reported in October that trustees of the Royal Cambridge Home had held preliminary talks with the Royal Star & Garter in Richmond.

Under the proposals, the 20 elderly residents of the home on Hurst Road would be moved to Richmond for 18 months while a new joint facility was constructed on the site.

Residents, relatives and staff protested outside the building with signs emblazoned with slogans like “Fight the Proposal”, “Keep Cambridge Home Independent” and “Save Cambridge Home From Closure”.

However, this week, chairman of the trustees General Sir Jeremy Mackenzie, revealed negotiations had ground to a halt.

“I told the ladies that and the news was received with ecstatic clapping,” he said. “Royal Star & Garter were finding it hard to get planning permission and we didn’t want to get dragged away from our nice site.

“We will look for other options to raise funds for the home.”

Sir Mackenzie had faced criticism for initially keeping staff and residents in the dark about the proposals.

When asked whether he regretted the way the situation had been handled, he said: “No, not at all. We’ve got to look forward and work out how we’re going to ensure the viability of the home.”

Robin Hurlbatt, whose mother is in the home, founded SCORCH or Stop the Closure of the Royal Cambridge Home.

The Royal Cambridge Home was created in 1851 in memory of the 1st Duke of Cambridge, the seventh son of George III and grandfather of Queen Mary.

“Everybody within the home and all the friends and supporters are delighted,” said Mr Hurlbatt. “From the tone of the letter, Royal Cambridge Homes will stay an independent charity. In effect it was going to be a takeover by Royal Star and Garter. The home would have just been a name on a wing.

“Well done the Cambridge trustees for sticking to their guns when the deal didn’t look good for the home.”

He believed the Royal Cambridge Home did not need any major work done to it at the moment.

“It is a lovely home and the staff are wonderful,” he said. “They have already put new lifts in with a lottery grant.

“It is sitting on an extremely valuable parcel of land. A development of much greater density would have been built. It would have lost everything.

“I think that is the end of it. It is a new chapter and any development will be Cambridge Homes, not Star and Garter.”

A statement from the Royal Star and Garter Home said it was withdrawing from negotiations for the time being.

“Given that both are very old and established charities, these discussions have been complex with many issues to be considered on both sides,” it said.

“Regrettably, it has recently become clear that while significant progress has been made in these discussions, at the current time it has not been possible to agree the basis of a merger.

“The chairman and governors of the Royal Star & Garter Home have reluctantly, and after much reflection, decided to withdraw from negotiations for the time being, but would wish to leave the door open.”